Avoiding “Winner-Take-All” in the World of AI
by Steve Wendler, Senior Strategist
In a recent NY Times article, leading tech journalist Steve Lohr captured the anxiety of academic researchers about the concentrated wealth and power of a handful of tech titans. They fear that the geometrically increasing demand for computing power at the frontier of AI research will create an “AI Divide” between the haves and have nots. In layman’s terms, companies like Google (and parent Alphabet), Amazon, Microsoft, and Facebook hold such lopsided advantage that they will dictate the future. As the tech titans accumulate the majority of AI know-how by leveraging their immense resources of wealth, talent, and computing power, academia and lesser firms will be left behind.
In industry, CEOs have similar competitive fears. CEOs are faced with the dilemma of being disrupted or being a disrupter. Surveys of many CEOs confirm their fears of disruption by tech titans. In industry after industry, the old advantages of production scale and brand equity are losing ground to the new digital advantages of Amazon, Alibaba and many others seeking to seize once-loyal customers and markets. CEOs fears are more than important and urgent, they’re existential.
These concerns are well-founded. Research from Boston University’s Technology and Policy Research Initiative confirms the large divide between the technology haves and have nots. IT Industry concentration is intensifying the market power of resource-rich firms. It’s also reducing the diffusion of knowledge and limiting innovation by competitors. AI may well exacerbate this industry concentration.
While CEOs are most fearful of the tech titans they also worry about insurgents within their own industries who adopt some of the tech titans’ techniques. For example, The Home Depot recently announced its investment of over a billion dollar to reimagine and reengineer their logistics operations to compete with Amazon.
At the same time, CEOs see opportunities with AI. Gartner, a leading technology analysis firm, has found that CEOs and CIOs identify AI as one of the most strategically important technologies. Most CEOs regard AI as a means to reform their business models and achieve higher growth. According PWC, “Eighty-five percent of CEOs agree that AI will significantly change the way they do business in the next five years.”
However, the lofty expectations of leveraging AI to capture digital growth and reform tired business models remain unfulfilled. IT and consulting companies offer many AI products and services but no complete, off-the-shelf solutions. This is roughly analogous to business leaders seeking a seat on a flight but instead being offered blueprints for a jet. Today’s reality is what I refer to as “The AI Fulfillment Gap.”
According to Gartner “The reality is that end-user organizations require complete AI solutions that solve business problems, rather than just more technology.”
Enterprise IT systems scale production but don’t deliver the promises of AI. Most AI platforms enable consultants use “cognitive platforms” to create custom solutions. But they demand advanced data science skills, large budgets, and years to complete. Moreover, chatbots provide useful automation but fall far short of enterprise-wide business model transformation. AI technology and toolkits fail to meet C-suite expectations.
Corporations and governments need a complete Enterprise AI solution that enables the agility to generate new growth – and deliver business outcomes within months, not years. By transforming enterprise-wide business processes and leveraging existing assets, workflows, and culture without internal disruption, businesses are empowered to become disruptors and defend against disruption.
Such complete Enterprise AI solutions are beginning to emerge. They embody a new discipline known as Cross-Enterprise Management that enables business leaders across many industries to compete and win – creating a world of smart, AI-fueled competitors rather than the world of AI haves and have nots that many fear.